Finance Blog

Tips for Recovering from a Financial Setback in Retirement

Written by Steve Repak on October 22, 2013 in Retirement  |   9 comments

Financial setbacks can be difficult at any point in your life, but they’re especially devastating during retirement. With no steady paycheck coming in, it can be terrifying to watch your retirement savings slowly disappear as you try to recover. Nobody plans on things going wrong,…

retirement savingsFinancial setbacks can be difficult at any point in your life, but they’re especially devastating during retirement. With no steady paycheck coming in, it can be terrifying to watch your retirement savings slowly disappear as you try to recover.

Nobody plans on things going wrong, but sometimes life just happens. You might be tempted to curl up into a ball and hope your problems just go away, but I will tell you firsthand that doing so won’t help you.

When things get tough, you need to remain positive, flexible, and determined. Following these four tips can help you recover from any financial setback you may face in retirement:

1. Assess your current situation.

Your first step is to gather as much data as possible. You want to know exactly what happened, why it occurred, and how it impacts you. Ask yourself:

  • Was the setback caused by me, someone else, or some unforeseen circumstance?
  • How will the setback affect me right now?
  • How will it affect me in the future?

Next, gather together details about everything that makes up your present financial situation: income, expenses, savings, and investments. The objective here is to get as much information as possible in order to formulate the steps necessary for recovery.

2. Define your goals.

Once you have all of the facts, you need to set some goals. This means different things to different people, but it can be helpful to break down your goals by time and results, no matter what your situation.

For example, you may have just suffered a medical emergency that you paid for by tapping your savings or credit card. Your goal could be to have 75 percent of the debt or savings repaid within four years.

Remember, your goals need to be SMART: specific, manageable, ambitious yet achievable, realistic, and time-bound.

3. Determine your course of action.

There are several steps you have to put into action to rebuild your finances. Once you know your situation and have your goals set, make a plan or roadmap to follow.

Your plan needs to be in writing so you can refer back to it regularly and hold yourself accountable. Writing down your goals will help set you up for success.

4. Monitor and make adjustments.

No plan is foolproof or set in stone. Continue to mark your progress and, if necessary, make adjustments. You may find that you need more time to meet your goals, or something may come up that gets you off track and forces you to adjust your plan again.

Remain flexible. You may not always have control of the situation, but you can control how you react to it. If you regularly monitor your progress toward your goals and make changes when necessary, you will find that there is nothing that will keep you down forever.

Steve Repak, CFP®, is the author of  Dollars & Uncommon Sense: Basic Training for Your Money.


  1. Tanya tooley says:

    per the bank we just need the credit report fixed so they can redo the loan for the car.

  2. Anonymous says:

    This article was definitely inspiring. I personally had some financial issues that I was afraid I would not overcome. Being flexible and not giving up was what helped me get through it.

  3. Anonymous says:

    Because of the recession I had to declare bankruptcy. I am in my 50s and had to drain my retirement accounts also. My credit is a mess and I have no money for retirement. I guess I will have to work for the rest of my life. Any suggestions?

  4. Raymond D. says:

    I encoured a bunch of medical bills. I am close to retirment and I am concerned that the hospital will come after me. What can I do?

  5. Diane R. says:

    This is great advice for anyone that is experiencing a setback, financial or otherwise. It always helps to calm down, think things through, and plan, but the easiest reaction is to ignore it and hope it goes away or fixes itself. Not realistic!

  6. Byron Cole says:

    I am not close to retirement yet. What is a better option… Roth or non Roth?

  7. Tom says:

    Most people don’t set any goals and wonder why they continue spinning their wheels. It boils down to what is important to you. You can either work until you die or put together a plan so you don’t have to.

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